Microsoft's CEO says the biggest game of the year chose its cloud — here's what really happened

"Playerunknown's Battlegrounds" is the hottest game of the year, and now it's hosted on Microsoft Azure. Bluehole

Last week, Microsoft CEO Satya Nadella said that "PlayerUnknown's Battlegrounds," the hottest game of 2017, is now running on the Microsoft Azure cloud platform.

However, "PUBG" is still largely using Amazon Web Services, Azure's biggest rival.

Regardless, it could be a big win for Microsoft — the game is a large part of the Xbox One holiday sales push, and now it could help bolster Azure's appeal to the significant market for video games.

When Microsoft reported earnings last week, CEO Satya Nadella highlighted that "PlayerUnknown's Battlegrounds" — the hottest video game of 2017 — is now using the Microsoft Azure cloud platform to power online play.

"Gaming pushes the boundaries of hardware and software innovation, with some of the most CPU and GPU-intensive applications and content, giving us a huge opportunity in the cloud," Nadella said during Microsoft's recent earnings call, citing "PUBG" as an example.

However, we're hearing that Nadella's remarks don't tell the whole story. "PUBG" isn't leaving the Amazon cloud; most of the game's databases and back-end services still run on AWS. It's just that the game has turned to Azure to bolster its infrastructure as it deals with a massive influx of players.

If you haven't heard yet, "PlayerUnknown's Battlegrounds" is a bloody battle royale for Windows PC gamers, where 100 players are dropped onto an island, forced to scavenge supplies and fight to be the last person standing. It's become a monster hit on the Windows PC, already selling over 13 million copies this year at $30 a pop.

And Microsoft recently announced a partnership with the game's developers to bring it to the Xbox One game console by the end of the year, and the Sony PlayStation 4 later, if ever. It was a big win for Microsoft, which expects "PUBG" to be a major reason why people buy the Xbox One over the PlayStation 4 this holiday season.

"Crackdown 3" is an exclusive Xbox One game, coming next year. It'll use the Microsoft Azure cloud to power its impressive visual effects. Microsoft

To go back to the cloud for a moment, video games are actually a key battleground in the cloud wars. As Nadella notes, modern video games take immense amounts of processing power to run properly. To meet those needs, titles like "PUBG" are turning to the cloud, where developers can pay-as-you-go for fundamentally unlimited supercomputing power out of these tech titans' own massive data centers.